Which of the following investment decision rules (if any) assumes that the cash flows generated are reinvested over the life of the project at the firm's cost of capital?
A)payback period
B)internal rate of return
C)accounting rate of return
D)none of these

Question

Quizplus · Accepted Answer

The assumption that cash flows are reinvested at the firm's cost of capital is typically associated with the Net Present Value (NPV) method, not with the payback period, internal rate of return, or accounting rate of return.

Which of the Following Investment Decision Rules (If Any) Assumes